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TMI Blog2004 (2) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... o hundred rupees. Since the said section provides for payment of tax as well as the interest to take care of any pecuniary advantage gained by the tax payer by delayed payment of tax, it is understandable that the minimum penalty prescribed is Rs. 100/- only and not Rs. 100/- per day which would be draconian in its effect. The rationale for prescribing a minimum penalty of Rs. 100/- is also understandable as a smaller amount than that would be a paltry amount not worth the effort of collecting it. I, therefore, hold that the minimum penalty prescribed under the said Section 76 of F.A. 94 is Rs. 100/- only and not Rs. 100/- per day of delay. The section 80, clearly authorises the adjudication authorities to exercise their discretion in not imposing any penalty for delay in payment in service tax and delay in filing return if the assessee proves that there was reasonable cause for the said failure. However, no such discretion has been allowed in respect of penalty for failure to make an application for registration u/s 75A for which a small amount Rs. 500/- has been prescribed. Accordingly, I hold that the adjudicating authorities have discretion not to impose any penalty for delay i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be of Rs. 100/- per day whereas the statute provides a minimum penalty of Rs. 100/- only. He also cites the decision of the Tribunal in the case of C.C.E., Jaipur v. Milan Tent Palace -2001 (131) E.L.T. 274 to claim that since this is a new tax, no penalty should have been imposed. He also states that the penalty prescribed are discretionary and the lower authorities should not have imposed the penalty at the prescribed rate without exercising discretion. 3. In respect of Appeal No. ST/41/03-MUM., a penalty of Rs. 1,28,903/- has been imposed under Section 76 of F.A. 94 for delay in payment of service tax. The amount has been calculated at the rate of Rs. 100/- per day of delay and limited to the service tax amount. In addition, penalty of Rs. 4,000/- has been levied under Section 77 of F.A. 94 for late filing of the return at the rate of Rs. 1,000/- per return. Shri Bakul B. Modi, learned C.A. appearing for the appellants mainly challenges the penalty imposed for delay in payment of the service tax. He states that the appellants were unaware of their tax liability and that after they were informed of their liability, they have promptly paid the tax amount with interest. He also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalties imposed in the above cases have been by and large calculated on the basis of Rs. 100/- per day of delay in paying the service tax subject to the maximum of the tax amount. It is apparent that the lower authorities are under the impression that the minimum penalty prescribed under Section 76 of the F.A. 94 is Rs. 100/- per day and that the same has to be mandatorily imposed in all cases. The main issues involved in these appeals are :- (1) Whether the minimum penalty prescribed under Section 76 of the F.A. 94 is Rs. 100/- per month or Rs. 100/- only. (2) Whether the minimum penalty prescribed under said Section 76 is to be mandatorily imposed or there is any discretion available with the adjudicating authority to reduce or waive the same. (3) Whether there is any discretion to impose penalty for delay in registration and delay in filing returns under Sections 75A and 77 of F.A. 94. (4) Whether Section 76 of F.A. 94 is attracted at all in a case where service tax has already been paid after some delay. 8. I find that there are large number of decisions which have been passed by the Tribunal on these issues. Some of the decisions are as follows :- (1) C.C.E., Calcutta v. B.L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Bangalore-I - 2004 (60) RLT 181 (CESTAT - Ban.) - In this order dated 26-9-2003, the same Bench that has passed the order at Sr. No. 9 above has held that the minimum penalty under Section 76 of the F.A. 94 is Rs. 100/- only. 9. Section 76 of the F.A. 94 as substituted by Finance (No. 2) Act, 1998 w.e.f. 18-10-1998 reads as under :- Any person, liable to pay service tax in accordance with the provisions of Section 68 or the rule made thereunder, who fails to pay such tax shall pay in addition to paying such tax, and interest on that tax in accordance with the provisions of Section 75, a penalty which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which such failure continues, so, however, that the penalty under this clause shall not exceed the amount of service tax that he failed to pay. 10. It has been argued on behalf of one of the appellants that Section 76 cannot be applied to a person who has paid the tax after some delay. This plea has been advanced on the basis that the said Section applies to a person who fails to pay such tax . However, looking at the construction of the section including the fact that the maximu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty prescribed under the said Section 76 of F.A. 94 is Rs. 100/- only and not Rs. 100/- per day of delay. 13. Coming to the question whether there is a discretion with the adjudicating authorities not to impose the minimum penalty under the said Section 76 for delay in paying the service tax and also for imposition of penalty for non-registration and delay in filing return, I find that some of the earlier decisions of the Tribunal have looked at case laws relating to other legislations. I am of the view that such recourse is not necessary in view of Section 80 of the F.A. 94 which reads as under:- Notwithstanding anything contained in the provisions of Section 76, Section 77, Section 78 or Section 79, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure. This section clearly authorises the adjudication authorities to exercise their discretion in not imposing any penalty for delay in payment in service tax and delay in filing return if the assessee proves that there was reasonable cause for the said failure. However, no such discretion has been allowed in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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